uk card payments 2015

UK Card Payments 2015

9455_UK_CP_2015_INTERACTIVE.qxp_Layout 1 01/06/2015 12:17

http://www.theukcardsassociation.org.uk

mailto:[email protected]


UK Card Payments 2015 provides a comprehensive summary of howand where cards were used in 2014. This includes data on how manycards consumers held and what they bought with them, both in thehigh street and online. It also includes details of personal card spending habits, and forecasts how our use of cards is expected tochange over the next ten years.

The UK Cards Association will be happy to help if you have any queriesregarding this publication.

For queries about the data in this publication please contact Information Management:

David Obuwa/Nigel Burt/Silvija KrupenaTel 020 3217 8421/8244/8460Email [email protected]

For member enquiries relating to users and holders of cards, and forecasts, please contact Policy and Markets:

Email [email protected]

For membership information or further details about The UK Cards Association please contact:

Tel 020 3217 8200Email [email protected]

THE UK CARDS ASSOCIATION

A glossary of terms used in this publication canbe found at:

www.theukcardsassociation.org.uk

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Cards are the most popular payment method in the UK by value. They allow cardholders to pay for goods and services easily, convenientlyand securely. Card spending accounted for 32% of GDP in 2014 and is critical for economy. Card spending is expected to continue to growover the next decade and to overtake cash as the predominant way to pay.

Cards are issued by a variety of organisations such as banks, building societies and other financial services companies. The types of cardsissued and their level of functionality vary from card issuer to card issuer and between the different card schemes. The major cardschemes include American Express, Diners Club, JCB International, MasterCard and Visa. These schemes are the operators of the cardsystems that set the rules under which transactions occur, process transactions and provide a settlement function. This report looks in detail at how cards are held and used, and includes summary tables on cards in issue, the number and value of transactions, and point-of-sale terminals.

Publications are available by contacting: [email protected]

For more information please visit our website: www.theukcardsassociation.org.uk









The UK Cards Association is the trade body for the card payments industry in the UK, representing financial institutions which act as card issuers and acquirers. Members of the Association account forthe vast majority of debit and credit cards issued in the UK – issuing in excess of 56 million credit cardsand 95 million debit cards – and cover the whole of the card acquiring market.

The Association promotes co-operation between industry participants in order to progress non-competitive matters of mutual interest; informs and

engages with stakeholders to shape legal and regulatory developments; develops industry best practice; safeguards the integrity of the card payments

industry by tackling card fraud; develops industry standards; and co-ordinates other industry-wide initiatives such as those aiming to deliver innovation.

As an Association we are committed to delivering a card payments industry that is constantly focused on improved outcomes for the customer.

More information about The UK Cards Association is available at: www.theukcardsassociation.org.uk

UK CARD PAYMENTS 2015

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Table of Contents

1 Overview of the UK Card Payments Market 51.1 Economic background 51.2 Number of cards in issue and holdings 5 1.3 Card transactions in 2014 61.4 Card acceptance in 2014 71.5 Credit card borrowings 81.6 The future 8

Key Statistics 2014 10

2 Cards 122.1 Credit cards 122.2 Debit cards 232.3 Contactless cards 282.4 Other cards 31

3 Card Acceptance and E-commerce 333.1 Merchant acquiring 333.2 Card spending patterns 343.3 E-commerce 39

4 Card Fraud 424.1 UK Card fraud – overview 424.2 Fraud-to-turnover ratios 424.3 Remote Purchase (CNP) fraud environment 434.4 Fraud in the face-to-face environment

(including cash machines) 434.5 Cross border fraud 43

5 Recent Regulatory Developments 445.1 FCA Credit Card Market Study 445.2 Payment Systems Regulator 445.3 Interchange regulation 455.4 Other developments 45

6 The Future of the UK Card Industry 466.1 Forecasts 466.2 Card technology developments 49

7 International Comparisons 507.1 Number of cards in issue 507.2 Card usage 53

8 Summary Tables 568.1 Cards in issue 568.2 Transaction volumes 578.3 Transaction values 598.4 Point-of-sale terminals 61

BoxesConsumer research 12Credit card profiles 17Credit card spending and GDP growth 18Understanding credit card borrowing 19Online spending 22African mobile payments 55

UK Card Payments 2015




Charts


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1 Overview of the UK Card Payments Market 51.1 Number of cards at year-end 51.2 Number of credit and charge card and debit card holders 61.3 Number of credit and debit card purchases 61.4 Value of credit and debit card purchases 71.5 Credit card and debit card payment volume forecasts 9

2 Cards 132.1 Number of credit and charge cards in issue 132.2 Number of credit and charge card holders 132.3 Proportion of credit card holders holding a given number

of cards 2014 142.4 Number of credit card holders using their credit cards

at least once a month to make purchases 142.5 Comparison between credit card spending and lending 152.6 Volume and value of credit card transactions 152.7 Total value of transactions on credit and charge cards 162.8 Levels of gross credit card lending and repayments 202.9 Write-offs as a percentage of credit card borrowings 212.10 Quoted rates on unsecured consumer credit 2004 – 2014 212.11 Annual purchases per debit card 232.12 Number of debit cards in issue and usage showing card types 242.13 Number of debit card holders 242.14 Debit card holding by demographic group 2014 242.15 Multiple debit card holding 2014 252.16 Adults using only debit cards or debit and credit cards 252.17 Debit card purchases 262.18 Debit card spend and GDP growth 262.19 Debit card ATV growth compared to the CPI and RPI indices 272.20 Contactless cards in issue 282.21 Number of contactless terminals 292.22 Contactless card transactions 302.23 Cards with ATM functionality 31

3 Card Acceptance and E-commerce 333.1 Number of outlets and terminals accepting cards 333.2 Average number and value of transactions per terminal 343.3 Annual expenditure on credit and debit cards (£ billions) 343.4 Spending on cards (£ billions) by merchant sector 2014 353.5 Number of purchases (billions) by merchant sector 2014 353.6 Retail Sales: proportions using debit cards, credit and

charge cards, cash and cheques 363.7 Largest changes in card spending by merchant categories

between 2013 and 2014 363.8 Proportion of online and face-to-face card spending across

merchant categories in 2014 393.9 Proportion of online purchases and spending by merchant

categories 2014 39

3.10 Comparison of face-to-face and online ATVs by merchant categories 2014 40

3.11 Consumer internet card spending 403.12 Consumer internet card payment volumes 413.13 Consumer internet purchases by type of retailer 2014 41

4 Card Fraud 424.1 Fraud losses on UK cards 424.2 Fraud-to-turnover ratios 43

6 The Future of the UK Card Industry 466.1 Debit cards: UK purchase forecasts 466.2 Credit and charge cards: UK purchase forecasts 48

7 International Comparisons 507.1 Number of debit cards per capita, Europe 507.2 Number of credit cards per capita, Europe 517.3 Number of debit cards per capita, rest of the world 527.4 Number of credit cards per capita, rest of the world 527.5 Credit and debit card transactions per capita and ATVs (£)

in 2013, Europe 537.6 Credit and debit card transactions per capita and ATVs (£)

in 2013, rest of the world 547.7 Proportion of card purchases and cash acquisition

2009 and 2013, Europe 547.8 Proportion of card purchases and cash acquisition

2009 and 2013, rest of the world 55

Tables

2 Cards2.1 Retailers accepting contactless card payments 29

3 Card Acceptance and Internet Use3.1 Comparing top ten locations for card usage in 2013 and

2014 – based on number of purchases 373.2 Comparing top ten locations for card usage in 2013 and

2014 – based on value of purchases 373.3 Comparing top ten locations for card usage in 2013 and

2014 – based on average value of purchases 38




1. Overview of the UK Card Payments Market

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1.1 Economic background

The year 2014 marked the post recession turning point, with economic growth returning to its pre-recession level, despite some indications of a slowdown in thefinal quarter. The Office for National Statistics estimates the economy grew by2.8% during the year. The improving economy was evident across a number ofeconomic indicators, with unemployment declining and the manufacturing andservice sectors expanding. There was also a surge in the housing market, withhouse prices increasing1 by about 7.0% during the year. However, there weresome signs of slowdown towards the end of the year.

Inflation continued to decline in 2014. The Consumer Price Index stood at 0.5%at the end of 2014, which was 1.5 percentage points below the level recorded ayear earlier. Factors contributing to this decline include falling commodity prices, supermarket price wars and discounting within the retail sector.

In spite of the improvement in the labour market, wage growth inflation remainedsubdued. However, with an improving economy and rising consumer confidencehousehold spending remained strong, in part funded by a reduction in savingsand supplemented by increased usage of unsecured credit. This was evident in retail sales, which averaged a monthly growth rate of 3.1% during the year. Subdued wage inflation was also a key factor behind the decision by the Bank ofEngland to keep the headline interest rate unchanged at the historical low of 0.5%.

1.2 Number of cards in issue and holdings

Cards continue to play a crucial role in everyday life. This is evident in theirgrowth over the past decade – a trend that continued into 2014. The total number of cards in issue increased slightly by 1.1% to 159 million. Cards are defined as debit, credit and charge cards and can be used to make paymentsand withdraw cash. ATM-only cards can only be used to withdraw cash, and onlyfrom cash machines.

The main drivers for growth within the card market were credit and charge cardswhich, when combined rose by 2.8% to 63 million. The rationalisation of the premium end of the market continued with the streamlining of portfolios by someissuers, consolidating marginal differences in the reward proposition betweensome gold and platinum products. The number of gold cards decreased 28% to3.6 million. This was offset by a rise in the number of platinum cards, which increased by 23% to 18 million. Meanwhile, the number of affinity credit cardsfell to 1.3 million, down 41% during the year. In contrast to this trend, the numberof co-branded credit cards increased by 19% to 6.2 million.

The number of debit cards was unchanged at 96 million, perhaps indicating thatthe high penetration level reduces the scope for further significant growth. Therewere however some offsetting movements between the products. Electron cardswere down by 28% to just under 1 million cards, in contrast to Debit MasterCardcards, which registered growth of 17% to 3.4 million. The growing prominence ofVisa Debit and Debit MasterCard products in the UK is due to the greater flexibilitycompared to purely online electronic cards. Products such as Visa Electron andMaestro require that all the funds are available at the time of the payment, incontrast to other card products where online authorisation is not always required.Additionally, Visa Debit and Debit MasterCard products are more widely accepted.

Cards with contactless functionality were first rolled out in 2007 and have continued to grow in number. Around 20 million contactless cards were issued in2014 to leave a year-end total of 58 million – 36% of all cards in issue. Awarenessof and confidence in the technology picked up during the year with an increasingnumber of businesses accepting contactless payments. The technology also received a big boost with the roll out of acceptance across the entire Transport forLondon (TfL) network, which has extended to increased use in other sectors ofthe economy.

Over the last ten years debit card holding (the number of people with cards) hasincreased whilst credit card holding has been largely stable. There were 48.5 million debit card holders in the UK in 2014. This was an increase of 1.2 millionfrom 2013, a rise in year-on-year growth observed since 2008. More than nine in ten adults have debit cards in their wallets and purses. The increase in debitcard holders can be partly attributed to population growth. In recent years the proliferation of bank accounts with a debit card issued to the account holder as standard has also driven much of this growth.


Mill

ions

Credit Charge

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

120

100

80

60

40

20

0

ATM-onlyDebit

Chart 1.1Number of cards at year-end

1 More details at: http://www.nationwide.co.uk/~/media/MainSite/documents/about/house-price-index/Dec_2014.pdf




Cardholders

Debit

MILLION48.5

Credit

MILLION31.3


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Cardholding is not distributed uniformly across society, with some groups beingmore likely to hold cards than others. For example, full time employees are morelikely to hold cards than those seeking employment. This is also true for those in the higher income brackets who are more likely to have debit cards than thoseon lower incomes. This trend also holds when looking at how people use thecards. On average, those with higher incomes and in full time employmentmake more payments using their cards than those with lower incomes or who are unemployed. Younger people are also more likely to hold and use debit cardsthan older people.

Population growth is expected to be one of the main drivers of future growth in thenumber of debit card holders. Furthermore, adults who open new bank accountswill expect debit cards to be issued as standard; this is particularly true for youngaccount holders, who will also expect payments to be made by debit card.

In 2014 the number of people with a credit and charge card in the UK was 31.3 million. This number continues to be in line with the long term trend over the past five years, with just over six in ten adults aged over 18 years holding acredit or charge card. Income is one of the strongest determinants of credit andcharge cardholding. Over 70% of people in households with annual incomes over £50,000 have a credit card compared to less than a quarter of people inhouseholds where the annual income is less than £10,000.

The typical credit card holder has also become older in recent years, perhaps reflecting stronger preference for debit cards among younger generations. In 2014over a third of credit card holders were aged 55 and over.

The number of credit cards per cardholder fell slightly to 1.94 per person in 2014.This is likely to be the result of people reducing the total number of cards that theyhold and consolidating to one primary credit card, since the number of peoplewith at least one credit card increased slightly. Just over 53% of all cardholdershad only one credit or charge card in their wallet in 2014. This was an increase on 2013, where 49% had only one card. Only 8% of cardholders had four or morecards in 2014.

Card

hold

ers

mill

ions

Credit and charge cards Debit cards

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

60

50

40

30

20

10

0

Chart 1.2Number of credit and charge card and debit card holders

Num

ber o

f pur

chas

es b

illio

ns

Debit purchases in the UKDebit purchases outside the UK

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Credit purchases in the UKCredit purchases outside the UK

14

12

10

8

6

4

2

0

Chart 1.3Number of credit and debit card purchases

1.3 Card transactions in 2014

Card transactions comprise of purchases completed at the point-of-sale, in-store,online or via a mobile device. Also included are cash withdrawals from cash machines as well as bank and post office counters. During 2014 the number of transactions using all cards increased by 9.1% to 16 billion, with corresponding values up by 5.4% to £802 billion. Debit cards accounted for themajority of transactions, given their greater numbers relative to credit and chargecards. The number of debit card transactions increased by 9.7% to 13 billion, withvalues up by 5.9% to £619 billion. Of this total, £434 billion was for purchases,both domestic and overseas, which were up by 9.6% during the year.

It is estimated that of this £434 billion, £175 billion were e-commerce. A proportionof e-commerce spending was with retailers who, while they are predominantly UK-based, process their card payments outside the UK. These transactions aresometimes termed as overseas sterling transactions (OSTs), and in 2014amounted to £15 billion using debit cards.




21% of card spending at UK merchants was online in 2014

21%


7

Valu

e of

pur

chas

es £

bill

ions

Debit purchases in the UKDebit purchases outside the UK

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Credit purchases in the UKCredit purchases outside the UK

700

600

500

400

300

200

100

0

Chart 1.4Value of credit and debit card purchases

1.4 Card acceptance in 2014

The number of merchants accepting cards continued to increase in 2014. Thetotal number of terminals in the UK accepting cards in the face-to-face environment,increased by 2.9% to 1.7 million. The number of outlets accepting cards increasedby 4.2% to reach 1.1 million. These figures do not include increased acceptanceof cards on transit networks, in particular the roll out of contactless acceptanceacross the TfL transportation network.

While the majority of transactions take place at point-of-sale terminals the industryis witnessing a continued growth in online payments. An increasing number ofmerchants are offering their goods and services via the internet. An increasing proportion of these transactions are made using smartphones and tablets.

A growing number of consumers are going online for shopping and entertainmentas online services tend to be more convenient and often cheaper. Shopping on themove using mobile devices is also becoming increasingly common. The number of card purchases made via the internet as reported by merchant acquirersamounted to 1.3 billion representing 11% of the total card purchases in 2014made in the UK. Corresponding online spending amounted to £119 billion accounting for 21% of total card expenditure. This growth in e-commerce and theenmeshing of the off and online retail experience will affect the future growth inthe number of terminals and face-to-face outlets.

For card spending at UK merchants, some long-standing trends continued in 2014:higher growth in debit card spending as opposed to credit cards, faster increasingspending in services relative to retail sales and a consistent decline in ATVs. Datacollected from merchant acquirers showed the total number of card purchasesrose by almost 10% to reach 12 billion, while the value spent rose by 6.4% toreach £567 billion.

The average transaction value (ATV) for debit cards continued to decline in 2014,falling by £1.70 to £48.25. This continues a downward trend since peaking at£52.75 in 2010, and has been driven by a number of factors. Chief amongstthese has been the increase in lower value transactions, previously made withcash; a trend reinforced by the rising acceptance and use of contactless cards, in particular following their introduction on the Transport for London (TfL) network.Record low inflation and falling fuel prices were added factors during the year.

In contrast to purchases, total cash acquisition from cash machines and bank andpost office counters using debit cards declined for the second consecutive year, afall that was registered both within and outside the UK. Both volumes and valueswere down by around 2.0%, with £185 billion withdrawn from 2.6 billion withdrawals.The average withdrawal value was £69, with the average withdrawal from countersamounting to £266.

The number of credit and charge card transactions increased by 8.3% to 2.8 billion,with values up by 4.6% to £171 billion. Of this total, £166 billion was for purchases, both domestic and overseas, which increased by 4.6% during theyear. An estimated £38 billion of this spending was e-commerce, with overseassterling transactions amounting to £8.5 billion. The ATV for credit and chargecards has also been trending downwards in recent years, since peaking at£72.98 in 2008. This continued into 2014 with the ATV falling by £2.13 to £60.62.

Cash acquisition using credit and charge cards increased for the first time since2005, rising by 5.6% to £4.1 billion. This total includes transactions both insideand outside the UK and was spread over 33 million withdrawals. The average withdrawal value increased slightly by £3.08 to £124.08. Putting this into abroader context, the volume of cash advances accounted for only 1.2% of allcredit and charge card transactions during 2014, which equated to 2.4% of thetotal value of transactions.

In spite of an increase in number, transactional activity using ATM-only cards was generally down. Within the UK withdrawals using these cards fell by 10% to£12 billion.





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1.5 Credit card borrowings

Credit cards continue to provide an important, flexible and convenient tool for household borrowing. Gross lending on credit cards increased by 4.6% during the year, as the reduction in the level of economic uncertainty and easing creditconditions contributed to improved consumer confidence and consumption. Netlending also increased during the year partly driven by this improving economicbackdrop.

By the end of 2014 households owed a total of £1.47 trillion in secured and unsecured borrowings. Of this, 89% was secured debt (mostly on property), 7% was owed on other unsecured credit such as loans, with 4% owed on credit cards.

Borrowings (£1.47 trillion)

on other unsecured credit

on secured debt

on credit cards4%

89%7%

Card payments made daily in the UK

2004

15.7MILLION

2014

31.6MILLION

2024

52.5MILLION

Share of non-cash payments in the UK made using cards:

2004

2014

2024

46%

58%

67%

1.6.1 Debit cards

Consumers’ use of debit cards is expected to contribute a significant portion of this increase. Young adults will have grown up familiar with debit cards and will likely use them as soon as they qualify to receive them on their account.Increasingly, consumers are also expected to increasingly make low-value payments using debit cards. This will be driven by a number of factors, including:

• the rise in awareness of contactless payments• the ongoing roll out of contactless-enabled cards being issued as standard

to account holders• an increase in the proportion of retailers able to accept contactless payments.

It is predicted that more businesses accept debit card payments as it becomesmore cost-effective, and as consumers increasingly expect to be able to pay thisway. This will increase the opportunities available to consumers to use their debitcards, where previously they may have used alternative payment methods suchas cash.

Technological change may lead to a large number of debit card transactions without a physical card, e.g. a mobile phone with Near Field Communication(NFC) capabilities. There are already a number of services available that offer thisfunctionality. However, the anticipated introduction of services such as Apple Payand Samsung Pay to the market may see an increase in the use of this type ofform factor to initiate card payments. This is expected to appeal in particular toyounger consumers and early adopters of technology, and is forecast to grow inpopularity over the coming decade.

UK credit card debt has declined from a peak of £69.1 billion (February 2006) to £61.1 billion in December 2014. Only 43% of this incurred interest. This is attributable to balances being paid off before the end of the interest free period, as well as balances on 0% promotional rates.

Repayment levels were strong in 2014, continuing the trend evident in 2013. Thisdynamic principally stems from cardholders who use their credit cards mainly as a means to transact, rather than borrow, in many cases looking to benefit from rewards on offer.

1.6 The future

For both debit and credit cards, the volume and value of payments excluding cash withdrawals within the UK are forecast to increase substantially over the next10 years. The combined total volume of payments is expected to increase from11.5 billion payments in 2014 to 19.2 billion payments in 2024. The total value of card payments in 2014 was £550 billion and is forecast to increase to around£900 billion by 2024.




Credit card borrowing has been subdued in recent years due to uncertainty in thestate of the UK economy; however there have recently been signs of improvementin the economy. Consumers are often more willing to use credit cards as sourcesof short- or medium-term finance when they are confident about their financial futures. If the economy continues to improve, credit card borrowing would be expected to increase, as consumers make purchases they may have deferred during the period of economic uncertainty. Such purchases are likely to includeitems such as household goods and foreign travel.

Increasing awareness and acceptance of contactless payments is expected to further boost credit card volumes. In particular this will increase the number oflow value transactions that consumers make and will particularly appeal to thetransactor market for making everyday purchases. Growth in mobile contactlesspayments is also likely, especially among early adopters and those in younger agegroups. Nevertheless, it should be noted that mobile payments are likely to havemore significant impacts among debit card holders due to the demographic difference between the groups – credit card holders are more likely to be older.

Credit card acceptance by small and medium size enterprises (SME) is also expected to increase. Merchant acquirers have introduced a number of card acceptance business models and associated technology aimed at the SME market.This in turn has broadened the range of businesses that find it cost-effective to accept credit card transactions. The increase in SME acceptance of credit card payments may also have an effect on business-to-business payments. Of course, it remains to be seen how this may be affected by the European Commission regulation of interchange fees.

A strengthening economy will also increase the market for corporate credit cards,which are often used to pay for employee travel and expenses. Whilst this sectorhas been falling in recent years as the economy stalled, it is likely to increase asthe economy recovers. Increased credit card holding by large organisations andthe public sector will also increase growth.

In 2024 credit and charge card purchases are forecast to increase to 3.2 billiontransactions, up from 2.3 billion in 2014. Values are projected to rise from £142 billion in 2014 to £183 billion in 2024.


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Debit card payments

£408 billionpayments worth

2014

9.2 BILLION

£718 billionpayments worth

2024

16.0 BILLION

Small businesses are also likely to increase their use of debit cards, a continuationof the trend observed in recent years. The number of cards issued to small businesses is expected to increase, and those businesses are expected to use theircards for an increasing number of transactions. As the number of businesses thataccept card payments continues to increase, there will be an ever-greater numberof opportunities for businesses to use debit cards to pay their suppliers, as an alternative to paying using other methods such as cheques or Bacs.

Growth in online shopping is also expected to drive continued increases in thevolume of debit card payments made each year in the UK. This is not only limitedto e-commerce, but also the rapidly growing m-commerce sector: consumers’adoption of smartphones and tablets has increased their access to the internet, including online shopping. Traditional high street retailers are now engaging with their customers through all of the available shopping channels, particularlythe digital mobile and internet channels, as they seek to capitalise on the omni-channel opportunity. This may provide a seamless commerce experience (e.g. ‘click-and-collect’ services) or generate completely new purchases fromcustomers who otherwise would not have easy access to a store. Since debitcards are expected to continue to be the principal method that consumers use to pay for online purchases, growth in online shopping is expected to lead to increases in the number of debit card payments in the UK.

The volume of debit card purchases is forecast to grow to 16 billion transactionsin 2024. This represents a 74% increase on 2014 and is more than four timesthe number of payments made in 2004. The total value of debit card purchasesin 2024 is expected to reach £718 billion.

1.6.2 Credit cards

Credit card transaction volumes are also forecast to increase steadily over thenext decade. There has been a trend in recent years away from credit cards beingused primarily for borrowing purposes, to credit cards being used more for purchases. A growing number of transactors predominantly use their credit card for everyday purchases, perhaps in order to accrue points with the card issuer’s loyalty rewards programme. This type of purchasing behaviour has drivengrowth in credit card payment volumes and is forecast to continue. It should benoted however that the recent European Commission regulation of interchangefees may affect this market segment in the future, as card issuers might react to regulation by limiting their reward programmes, making them less attractive to consumers. Should these incentives offered by card issuers to consumers be reduced, credit card payment volumes may be adversely affected.

Volu

mes

bill

ions

Credit card paymentsDebit card payments

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

18

16

14

12

10

8

6

4

2

0

Chart 1.5Credit card and debit card payment volume forecasts




All cards

There were 178.9 million cards in issue: 56.9 million credit cards; 6.4 millioncharge cards; 95.7 million debit cards and 19.9 million ATM-only cards.

36% of all cards in issue were contactless by the end of the year, amountingto 58 million cards.

In 2014 cards were used to make 15.8 billion transactions (+9.1%) totalling£802 billion (+5.4%).

Card issuers reported that £175 billion was online, representing 29% of totalcard spending by consumers, businesses and government.

The average transaction value of an online transaction was £68.

The average transaction value of a contactless card was £8.26.

Debit cards

Debit cards were used to make 9.2 billion purchases in the UK to a valueof £408 billion.

There were 2.6 billion debit card transactions to acquire £180 billion of cash in the UK.

The number of debit card holders increased by around 1.2 million to 48.5 million

Around 91% of the UK adult population had a debit card in 2014. Thosein employment are more likely to have one than those looking for work.

Debit cards accounted for just over 51% of the value of UK retail sales in 2014.

The number of debit card payments made by UK cardholders in the UK isforecast to reach 16 billion payments in 2024, amounting to £718 billion.

Credit and charge cards

Credit and charge cards were used to make 2.3 billion purchases in theUK to a value of £142 billion.

Cash advances on credit and charge cards continue to be at historicallylow levels, and amounted to £4.1 billion in 2014.

On average, credit card holders made 69 purchases in the year, spending£4,000.

£4 out of £5 of all credit card spending in 2014 was made by card holderswho repaid the balance in full.

Around 43% of outstanding credit card balances bear 0% interest or arerepaid in full before the end of the interest free period.

Outstanding borrowing on credit cards has fallen from a peak of £69.1 billion in 2006 to £61.1 billion at the end of 2014, accounting for just 4.0% of the UK’s total personal borrowing of £1.47 trillion.

UK credit and charge card purchase volumes are expected to grow to 3.2 billion in 2024, with a total spend of £183 billion.


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Key Statistics 2014

82%

More than 82% of all card transactions were purchases

Approximately 37% of all online card purchases were completed via a smartphone or tablet

37%

Spending on contactless cards increased by 331% during 2014

of the adult population have a credit card

Credit card holding

60%





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In 2014 for every £100 spent 7.5p was fraudulent

£100

Card acceptance

UK merchants, retailers and service providers accepted 12 billion paymentstotalling £567 billion from customers using cards (including foreign-issued cards used in the UK).

Merchant acquirers reported £119 billion was spent online, representing21% of all spending by consumers, businesses, government and overseas visitors.

The number of card purchases reached a milestone of 1 billion within asingle month.

Within the merchant sectors, retail sales accounted for 69% of all cardpurchases, however, spending in retail fell to 49% of total card expenditure.

The food and drink sector (which includes supermarkets) remained the most popular category for card usage representing 35% of all card purchases.

Card fraud

Fraud losses on UK-issued cards increased by 6% to £479 million between2013 and 2014. This represented an increase of £28.6 million; of which69% was fraud via remote purchase (online, telephone and mail order)channels.

In 2014 almost nine in ten adults used the internet, with 58% who did so using a mobile device. 74% of users bought something online 74%

at UK merchants were made using debit cards

PURCHASES77% OF ALL

The average transaction value fell by £1.46 to

£47.26

THE LOWEST LEVEL IN MORE THAN A DECADE




uk card payments 2015

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